Biofuel Bet Aims to Harvest Fish That Feed on Algae

Start-Up Wants to Render Oil by Targeting 'Dead Zones' in the
Gulf of Mexico; 'The Sea Equivalent of Traveling Goats'

By RUSSELL GOLD
August 18, 2009

This image provided by NASA shows sediments in
the Gulf of Mexico taken by the Aqua satellite in Sept.
2002. - AP Photo/NASA

Each spring, fertilizer runoff from the Mississippi
River floods into the Gulf of Mexico, causing a massive algae bloom that
leads to a giant oxygen-deprived "dead zone" where fish can't
survive.

Now, this annual problem is getting new attention,
not from marine scientists but from entrepreneurs looking for a new
domestic source of fuel. And one start-up sees fish themselves being
part of the process.

The algae blooms are spawned each year as the
farmland runoff from as far away as Montana flows into rivers,
eventually reaching the Mississippi and flowing into Louisiana bayous
and out into the Gulf of Mexico. These nutrients are a buffet for the
floating algae, or phytoplankton, which are simple sea organisms that
eat and reproduce quickly. This algae bloom eventually sinks and feeds
bacteria, which undergo their own population bonanza, and the bacteria
suck up so much oxygen that fish and plants either move away or
perish.

These so-called hypoxic areas exist around the world,
and there were as many as 200 in North America in the spring, says
Robert J. Diaz, a professor of marine science at the College of William
& Mary in Virginia. The Gulf of Mexico dead zone is the second
largest in the world, after one in the Baltic Sea.

Scientists have been studying dead zones for decades.
The Louisiana seafood industry worries that dead zones threaten the
ecosystems that support the state's $1 billion shrimp industry as well
as other fisheries. Environmental groups are concerned that the runoff
from agricultural fertilizer is pushing a natural ecosystem toward
collapse.

Turning algae into a bio-based oil to run in
conventional refineries alongside crude has been a long-held dream of
biofuels entrepreneurs. Exxon Mobil Corp. last month announced a
partnership with Synthetic Genomics Inc., a biotech firm owned by
genomics scientist J. Craig Venter, to spend as much as $600 million
working on developing algae biofuels. Greener Dawn Research estimates
that privately held start-ups Sapphire Energy and Solazyme Inc. have
raised more than $75 million for their own algae-to-fuel effort.

This image provided by NASA shows sediments in
the Gulf of Mexico taken by the Aqua satellite in Sept.
2002. - AP Photo/NASA

Thus far, both of those projects plan to raise their
algae stocks in controlled facilities onshore.

LiveFuels Inc., a Silicon Valley start-up, has a
different idea. Rather than growing algae in onshore facilities, where
the cost of circulating the water can be high, LiveFuels wants to use
the algae in the dead zones. But instead of harvesting it directly, it
wants to go a step up the food chain, using algae to feed fish that
could be processed for oil.

"It is too expensive for humans to grow algae,
harvest it and get the water out and then convert it into a
petroleum-like substitute," said LiveFuels Chief Executive Lissa
Morgenthaler-Jones. It is easier and cheaper to harvest algae's oil the
way Mother Nature does it -- "which is to use fish," she said.

The fish would gobble up the algae and then be
harvested, cooked and pressed to extract fish oil -- a method already
used to produce omega-3 fatty acid dietary supplements.

LiveFuels, San Carlos, Calif., is testing out carp,
tilapia and members of the sardine family at a fish farm in Rio Hondo,
Texas, near the Mexican border. Once it figures out a good fish mix,
LiveFuels wants to release them in Louisiana bays -- more than 25,000
pounds of fish per acre -- to feast on the algae blooms. "This is the
sea equivalent of traveling goats: you have algae, we'll bring the
fish," she says, referring to companies that rent out goats to eat up
grasses on California hillsides to reduce the danger from wildfires.
They would truck in the fish and release them into a cordoned-off area.
Cages would be used to keep carnivorous fish out.

The company envisions building caged fish farms in
parts of the algae blooms in Louisiana bayous and offshore in the Gulf.
The algae would provide a free source of food to raise the fish, and
natural tidal flows would churn the algae to keep fresh nutrient-rich
water flowing through.

The idea isn't meeting universal praise. "Our
preference is not to wait until the Gulf of Mexico is a giant dead zone
and then have someone go out and collect the algae," says Ed Hopkins,
director of the Sierra Club's environmental-quality program. He favors
reducing fertilizer runoff upstream to cut off the nutrients that feed
the algae blooms.

LiveFuels also faces a more practical concern. Algae
blooms are seasonal and move around from year to year, so Livefuels
might have to design mobile fish farms to capture the moveable feasts.
The National Oceanic and Atmospheric Administration recently said the
dead zone this summer was the fourth smallest in the 25 years they have
been measured, though it was still about 3,000 square miles, larger than
Delaware.

Nancy Rabalais, executive director of the Louisiana
Universities Marine Consortium, is doubtful of the plan. "There are
several groups looking at phytoplankton as a biomass. But my sense is
there is not enough on a continual basis to make it economically
feasible," she said.

David T. Kingsbury, chairman of LiveFuels' scientific
advisory board and a former assistant director of the National Science
Foundation, said he was skeptical at first, too, "but I've come around.
It hasn't really been fully tested yet, but it seems like a reasonable
idea," he said.